Is the global banking industry in trouble? Economist David Rosenberg breaks it down and tells Power & Politics that an ‘elevated level of uncertainty is going to reinforce the trend towards a recession.’
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BREAKING: Recession News
LEARN MORE ABOUT: Bank Failures
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In recent months, there has been growing concern about the state of the global economy and the possibility of a looming recession. Many have turned their attention to the banking industry, in particular, as a potential trigger for such an event. However, according to a recent article in The Economist, these fears may be overblown.
The article argues that while there are certainly reasons for caution, the banking system is far more robust than many seem to believe. For one thing, the overall level of non-performing loans (NPLs) is relatively low. Despite some concerns about rising levels in certain countries, such as China and Italy, the proportion of bad loans has been falling in many parts of the world. This suggests that banks have been successful in managing credit risk, which is a key driver of banking crises.
Moreover, the article notes that regulations have strengthened considerably since the last major crisis in 2008. There are now stricter rules governing capital reserves and liquidity, which should help to prevent banks from becoming over-leveraged or losing access to funding in times of stress. In addition, the regulatory authorities have become more proactive in monitoring banks and intervening when necessary to mitigate risks.
So, if the banking system is relatively sound, why are so many worried about a recession? The article suggests that the concern may be driven by broader economic trends, such as the trade war between the US and China, political uncertainty, and high levels of public and private debt. These factors could all contribute to lower growth, which in turn could lead to decreased profitability for banks – even if they are not directly in danger of collapsing.
Nonetheless, the article concludes on a note of cautious optimism. While there may be some rough times ahead, the banking sector is likely to weather the storm reasonably well. Of course, there are always risks, and no one can predict with certainty what the future holds. But for now, it seems that the fears of a banking crisis may be misplaced.
Overall, The Economist’s analysis suggests that despite concerns about a possible recession, the banking industry is in a reasonably healthy state. While there are certainly risks, including rising levels of NPLs in certain countries and broader economic trends, the regulatory environment and the overall health of the system suggest that a major crisis is unlikely. This should provide some degree of reassurance to investors and consumers alike.
Buy gold/silver, crypto, water and canned food
Given the current state of the economy, I've noticed that my portfolio has been stagnant this year despite having invested in good companies. I have a reserve of approximately $700k that I'd like to see grow. Does anyone have any suggestions for how I can adjust my investment strategy in light of the recession to improve my portfolio's performance? I appreciate any insights or advice you can share.
Unlike the U.S., Canada hasn’t had a charter bank fail in a century. History explains why.
When gov't and banking officials say it's ok…it's probably not.
طاب يومك ايتها العين القديرة والمقتدرة والسلام عليكم
فك قيود الملائكة الساقطين بالسلاسل الأبدية في أعماق الظلام واطلاق سراحهم واعادة الملائكة الساقطين الذين تم طردهم من السموات وتزويجهم من نساء الجنة وبناء قصور لهم في الجنة واعادتهم لعبادتهم في السماوات. عدا الشيطان ابليس حتى يسجد لادم في قبره وموضعه في السماوات.
مستشار الخالق
Was it simple run or an operation? That is what needs to be investigated. SVB’s CEO and CFO sold their shares before bank-run which means they may have known in advance about possible bank-run. So if this series of bank collapse is by a deliberately designed operation, then Canadian banks are still safe? Also Canadian bank has only 100k deposit insured, would it be enough to protect ordinary depositors?
Trudeau got rid of food inflation tracking from StatsCan to hide the truth
If you look at the jobs numbers for February Canada hired mostly government workers. For every federal government worker you need 25-50 taxpayers ( don't forget they're well paid, excellent benefits and pension)
The economy is doing great!
Fraudulent banks, dont go to the fed for bailouts. Fraudulent banks go to other banks for loans.
The sky is falling ! The sky is falling !
Rosenberg made some excellent points. I don't see hyperinflation on the horizon but I do expect stress test to ease fear.
This won’t be an issue if the wealthy pay their fare share.
Yet another 30 billion tax payer bailout of banks during hard times like no other every couple years a new way to drain the tax payer put every failed banker and any criminal banker in jail
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I think since the fed is increasing the rate the treasury should convert low int bonds to variable rate status. That will keep the banks functioning for time being. what actually needs is govt to cut down expenses.
The U.S. has been in a technical recession. They've had 2 quarters of negative GDP.
One could say that Credit Suisse was dismembered and dissolved in acid in a consulate in Istanbul…
I find it so funny how they refer to the Saudis as "credit suisse's biggest shareholder". Keep it classy CBC
I wonder if Bimbos on TikTok/OnlyFans will get hit as well. Always an in demand market. That's the most abundant resource; thirsty men.
Contraction of credit WHILE cost of living and inflation going up will lead to mortgage defaults. Consumer proposals
Well if banks stopped playing with peoples money like a casino and that they always win !! they do not sadly for their customers. When governments have to give money to banks to keep them alive, well the public pays for that in the end. Governments funds is all the citizens money !!!!! No citizens money from taxes etc = no public servants, no renting buildings with public funds, no highly paid welfare checks for public employees etc. Just have to have a decent board and responsible on as well. I think this is all part of governments to remove paper money from citizens and only have plastic money. Add a recession above that, increase of foods prices, plus the war in Ukraine that is pulling all governments to give weapons, ammunition, fighter planes, tanks etc, and then they will be asking all said countries for more money to rebuild after their war with Russia. We have tough years for all to come sadly.
It's still going bankrupt.
Austrian economists predicted more than a year ago that there would be a financial crisis and government will ramp up money printing again accelerating inflation. Pick your poison. Government deficit spending and central bank interest rate manipulation to zero is the root cause.
I don't suppose sanctions have anything to do with what is going on.
Capitalism kills…
If credit swiss had to fail man that would be a huge deal